Acwa Power has signed a power purchase agreement (PPA) to develop the 700 MW Ar Rass solar photovoltaic independent power plant (IPP) in Saudi Arabia’s Al Qassim province. Once fully functional, the project will produce enough energy to power around 132,000 homes in the kingdom.
Valued at $450mn (SAR 1.7bn), Ar Rass is the largest PV project that has been tendered as part of Saudi Arabia’s National Renewable Energy Programme (NREP) to date, for which Acwa Power has been assigned to deliver 70% of the total 58.7 GW target.
ACWA Power will hold a (40.1%) stake in the facility, along with (20%) by the Water and Electricity Holding Company (Badeel), a wholly-owned PIF Portfolio Company, and (39.9%) will be owned by the State Power Investment Corporation from China.
Acwa Power aids Saudi Arabia in diversifying energy mix
Under the terms of the agreement, ACWA Power will sell energy produced by the project to the Saudi Power Procurement Company (SPPC) for a period of 25 years. The agreement was signed in the presence of HRH Prince Abdulaziz bin Salman bin Abdulaziz Al Saud, Minister of Energy of Saudi Arabia.
Commenting on the launch, HRH Prince Abdulaziz bin Salman emphasised that these newly introduced projects translate Vision 2030 into tangible outcomes, which ultimately contribute to reaching the kingdom’s optimal energy mix and its shift from consuming liquid fuels in electricity production to gas and renewable energy.
Meanwhile, Mohammad Abunayyan, chairman of Acwa Power said: “As Saudi Arabia’s leadership ramps up its multi- gigawatt plans for diversifying its energy mix to include renewable energy, solar power is a key component in unlocking positive economic, environmental and social outcomes, whether it is for consumer use, or in mega-projects.”
“At ACWA Power, we are proud to be part of this larger story and will work diligently to realise the multiplying effect of solar power, whether it is in job production or emissions mitigation.”
Acwa Power – which is a leading Saudi developer, investor, and operator of power generation, desalinated water, and green hydrogen plants worldwide – currently operates Sakaka, a 300MW solar facility; and is also working on constructing Sudair, a 1500 MW independent solar PV project with Saudi Aramco and the Water and Electricity Holding Company (Badeel), a wholly-owned PIF Portfolio Company – which is considered the largest of its kind in the kingdom and one of the largest solar energy projects in the world.
The Ar Rass IPP is expected to reach financial close (start construction) in Q4 2022.
Saudi Water Forum 2022
Saudi Arabia inked two contracts at the Saudi Water Forum 2022, according to the Saudi Press Agency. The first was for Ar Rass IPP with Acwa Power, and SPIC and WEHC as consortium members.
The second PPA was awarded to a consortium led by Jinko Power Company for the 300MW Saad Solar PV IPP. Valued at around $213mn (SAR 800mn), the project has a levelised cost of electricity of 5.56 HH/kWh.
SPA stated that the two projects will supply enough energy to power over 180,000 households while avoiding over 1.75 mn tons of carbon emissions per year.
HRH Prince Abdulaziz bin Salman added that harnessing renewable energy is an essential part of the endeavour to reach the optimal energy mix used in power production, which aims to have the share of each gas and renewables at 50% by 2030, displacing around one million barrel equivalents of liquid fuel per day used in electricity production, desalination and other sectors.
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